Correlation Between American International and Athene Holding
Can any of the company-specific risk be diversified away by investing in both American International and Athene Holding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining American International and Athene Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American International Group and Athene Holding, you can compare the effects of market volatilities on American International and Athene Holding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in American International with a short position of Athene Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of American International and Athene Holding.
Diversification Opportunities for American International and Athene Holding
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Athene is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding American International Group and Athene Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athene Holding and American International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on American International Group are associated (or correlated) with Athene Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athene Holding has no effect on the direction of American International i.e., American International and Athene Holding go up and down completely randomly.
Pair Corralation between American International and Athene Holding
Considering the 90-day investment horizon American International Group is expected to generate 1.17 times more return on investment than Athene Holding. However, American International is 1.17 times more volatile than Athene Holding. It trades about 0.04 of its potential returns per unit of risk. Athene Holding is currently generating about 0.03 per unit of risk. If you would invest 5,858 in American International Group on November 1, 2024 and sell it today you would earn a total of 1,683 from holding American International Group or generate 28.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American International Group vs. Athene Holding
Performance |
| Timeline |
| American International |
| Athene Holding |
American International and Athene Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American International and Athene Holding
The main advantage of trading using opposite American International and Athene Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American International position performs unexpectedly, Athene Holding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Athene Holding will offset losses from the drop in Athene Holding's long position.| American International vs. Axa Equitable Holdings | American International vs. Arch Capital Group | American International vs. Old Republic International | American International vs. Sun Life Financial |
| Athene Holding vs. Arch Capital Group | Athene Holding vs. Athene Holding | Athene Holding vs. The Hartford Financial | Athene Holding vs. Arch Capital Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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